S&P 500 rises to record, Nasdaq climbs to 14-year high

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks jumped on Monday, with the S&P 500 climbing above key resistance to a record high, as optimism over merger activity helped Wall Street erase this year's early weakness.

Gains were broad, with nine of the 10 S&P 500 sectors up on the day and a number of bellwethers, including Caterpillar Inc and Merck & Co , hitting 52-week highs.

Among merger and acquisition news, RF Micro Devices Inc agreed to buy TriQuint Semiconductor Inc for about $1.6 billion, while Men's Wearhouse Inc raised its cash tender offer for rival men's clothing retailer Jos. A. Bank Clothiers Inc to $63.50 per share from $57.50.

With the day's gains, the S&P 500 turned positive for the year while the Nasdaq hit a 14-year high. More than two-thirds of companies traded on the New York Stock Exchange rose on the day, while 63 percent of Nasdaq-listed companies gained.

The S&P 500 broke above 1,841, which seemed to propel further gains.

"That, probably from a technical perspective, provided some enthusiasm for stocks," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Also boosting stocks was news that Ukrainian President Viktor Yanukovich was ousted. While that leaves a potential power vacuum and an ailing economy, it calmed some worries.

"The macroeconomic risk of some kind of encounter in the Ukraine seemed to dissipate with the removal of the president and some calm being restored," Luschini said.

The Dow Jones industrial average rose 179.91 points, or 1.12 percent, to 16,283.21, the S&P 500 gained 19.54 points, or 1.06 percent, to 1,855.79 and the Nasdaq Composite added 45.092 points, or 1.06 percent, to 4,308.502.

Shares of RF climbed 20 percent to $6.96 while TriQuint gained 25.8 percent to $11.61. Men's Wearhouse rose 9 percent to $49.16 while Jos. A. Bank was up 8.2 percent at $59.58.

Humana Inc and UnitedHealth Group were both among the S&P's biggest percentage gainers, with Humana up 8.2 percent to $111.24 after it said the government's proposed cuts to the private Medicare program appeared to be less than it had forecast. UnitedHealth rose 3 percent to $75.99.

Aetna Inc rose 2.4 percent to $72.14 after giving a 2014 earnings outlook.

Despite the day's gains, many investors were concerned that markets were becoming overvalued as recent economic data failed to meet expectations, though the weak data has largely been blamed on harsh winter weather rather than worsening fundamentals.

Many traders are looking ahead to Thursday, when Federal Reserve Chair Janet Yellen will speak to the Senate Banking Committee in a semi-annual testimony about monetary policy.

Yellen's comments will be scoured for insight into the extent to which bad weather has impacted economic activity, as well as for confirmation that the Fed will not make any changes to its schedule for trimming stimulus.

(Additional reporting by Ryan Vlastelica; Editing by Bernadette Baum and Meredith Mazzilli)